"The glory of Our Empire shines on this universe with brilliance," a ruler once declared in a letter to courtiers in London. "Not one single person or country is excluded from Our kindness and benevolence." He had good reason to be pleased. His country sat astride the global economy. His army was large, his domains vast. He believed his country to be the center of the world, and a good chunk of the world agreed.

And yet, despite the fulsome satisfaction of this 1805 letter, its author, the head of the Manchu Qing dynasty and emperor of China, had cause for anxiety. Less than twenty years before, China had suffered a humiliating defeat in Vietnam and continued to have difficulty besting the Burmese, Tibetans and Zunghars. Trade with Europe was still expanding rapidly. But the European powers were quickly getting the upper hand by controlling shipping and financial flows, and China was developing a dangerous dependency on silver and opium. Until the late nineteenth century, China's economy was the largest in the world, but then it headed precipitously downward. The Chinese knew practically nothing about the modern firearms with which Europe was taking over the world.

Did the advisers to the Jiaqing Emperor warn him of the coming conflict with Europe and the potential collapse of the Chinese Empire? Perhaps some courageous and far-seeing mandarin spoke of Europe's rise, of the dangerous trajectory of the terms of trade, of the military modernizations of Britain, of the equally pernicious soft power of missionaries and merchants. The documentary evidence makes no mention of such a pundit. In 1816, after dealing with barbarians from Britain who refused to kowtow to the emperor, the Chinese court sent another letter to London: "The Celestial Empire has little regard for foreign things." By the time China learned the value of foreign things and adopted the Japanese approach of "Eastern thought, Western machines," it would be too late. The Chinese Empire had been carved up like a crisp Peking duck.

Two hundred years later, the roles are reversed. As John Quincy Adams once accused the Chinese of "arrogant and insupportable pretensions," so now America is subjected to the slings and arrows of the world's disgruntled and disaffected. Yet the US President surveys his realm and sees only cause for satisfaction: America is God's country and Americans his chosen people. There are barbarians at the gate, of course, repudiators of American benevolence who must be crushed. A small clutch of imperial cheerleaders, the Max Boots and Niall Fergusons, thrill to the President's muscular stance. Pundits, meanwhile, play the latest intellectual parlor game: name that imperial analogy. Will the US empire end with a Roman bang or a British whimper? Or, blind to the desperate need for reform and a tempering of arrogance, will the United States suffer China's nineteenth-century fate? In place of opium, there are the distracting pleasures of Chinese goods for sale at Wal-Mart. Instead of the redoubtable Vietnamese, there are the recalcitrant Iraqis.

In contrast to the emperor's court, an army of advisers are scrambling to warn Washington of the only threat on the horizon that could displace the United States in the next few decades. Their books assess China's potential at the periphery and in the Eurasian heartland. China is using trade and no-strings-attached aid to inveigle its way into the hearts of Africans and Latin Americans. It is building up its military and risking a showdown with the United States, most likely over Taiwan. Internal weaknesses such as poverty and corruption threaten to undermine the current Chinese system and create international havoc. President Bush is certainly getting more advice than the Chinese emperor did 200 years ago. But the warnings of impending confrontation reflect less the realities of China's new global stance than the unrealities of the US foreign policy establishment, which believes that the laws of geopolitics require an equal but opposite fall on the other side of the globe.

The "yellow peril" was once feared for the damage it could do near home. Washington strategists stayed up late at night worrying about Mao knocking down dominoes the length of the Asian littoral. There was also the Chinese influence in South Asia, and the Kremlin's worries about the Soviet Union's borders and millions of land-poor Chinese swarming into Siberia. But although China inspired the leadership of Albania, some Maoist guerrillas in Peru and a handful of French and American students in the 1970s, Beijing's influence outside its neighborhood was marginal.

Now that the Big Red Checkbook has replaced the Little Red Book, China has expanded its reach into far-flung regions. Journalist Joshua Kurlantzick has been writing about the rise of China's soft power for several years, and in his recent book Charm Offensive he describes a chessboard world in which one side's advancing pawns grab power from the other side's retreating rooks. "As the United States remains unpopular in many parts of the world, China finds willing partners," Kurlantzick writes. "In the worst-case scenario, China eventually will use soft power to push countries to choose between closer ties to Washington and closer ties to Beijing."

China is simply doing what the United States did during the cold war: cozying up to the powerful, extracting resources and buying influence. Kurlantzick expands Joseph Nye's classic formulation of soft power to include formal diplomacy and economic leverage alongside the more informal export of cultural values and norms. He describes a China of deep pockets that provides more loans to Africa than the World Bank, has promised $100 billion of investments to Argentina and Brazil, snatched up factories the world over and replaced striking workers with compliant Chinese, and outmaneuvered Japan to conclude a recent free-trade agreement with Southeast Asia.